What is the hermy hut made out of? i.e. what kind of wood? Pine and pine relatives (cedar, etc.) are VERY irritating to crabs and can make them drop their shells and, eventually, die. Did you rinse it in salt water and bake it before giving it to the crabs? That should kill any bugs living in it. You'd need to bake it around 175-200 degrees C or 350 degrees F for around half an hour.
If you need to find non-coated shells, look up hermit crab shells on ebay. You can get 75+ shells of all sizes for under $10 USD. Some shells are naturally shiny, though, so don't just assume that they're varnished.
Play sand isn't necessarily the best substrate for your crabs. Do a search for it in the search box and you will find lots of different information on it. Just because it says "screened and washed" doesn't necessarily mean that it's safe.I think that the shell grit could very well be why your crabs are having problems. It sounds very coarse, and could hurt their abdomens if it got into their shells. I recommend you try again with crabs, just use the shell grit as a dietary supplement (sprinkle a little in their food bowl every so often) instead of as a substrate.
Their diet also appears to have some major holes in it. It's good that you aren't feeding them commercial foods, but if they're only getting muesli (which from what I've seen after looking it up is kind of like oatmeal but with a few more grains in it) and only occasional fruits and veggies, they're missing a lot! They need meat and other proteins in their diet - it helps them to grow when they molt especially, but is needed every day - as well as always having access to fruits, veggies, flowers, nuts, oils, etc. There is a safe food list located at the epicurean hermit forum (you need to join to see it, I think) that is linked
http://www.epicurean-hermit.com/index.php?topic=2.0.
The general "food groups" most hermie owners use are (copied from an older post in an older topic because my computer is being dumb at the moment):
1. Flowers - these contain coloring compounds to help your crabs maintain their nice exo colors; I use these flowers: calendula, blue violet, blue malva, chamomile, hibiscus, rose, chickweed, cornflowers, honeysuckle, jasmine, rose, and sunflowers.
2. Cellulose - keep in mind that when you give them cellulose that they will also supplement their diets with cellulose in their tank - tearing apart cocohuts, cholla logs, etc.; oak/maple leaves, dandelion root/leaves, raspberry plant leaves, mangrove and red root pieces, etc. I know my crabs have been tearing apart my cholla because I took it out to clean the tank and the base of it was surrounding with crab poo! So they do eat that if offered. I also offer them pieces of sterilized sponge occasionally.
3. Fruits - fresh or dried fruit. Try to stick to organic if you can as it's generally better for them (less risk of getting sick from pesticides). If you offer commercial dried fruit you should ensure that there are no preservatives at all as most of these can be harmful to your crabs. These are important for the vitamins and minerals in them as well as the coloring compounds. I offer coconut (dried), pineapple (dried and pieces of fresh made from the outside pieces with flesh on them; a byproduct of cutting a fresh pineapple), apples (dried and fresh), bananas (I have a mushy brown one in the freezer that I cut pieces off as well as a dried one), cranberries (dried), raisins (no preservatives), grapes (fresh), strawberries (fresh and dried), orange (dried), mango (fresh and dried), etc. This is the easiest food group to give them as they are usually readily available in your house.
4. Seaweed/algae - these provide very important vitamins and minerals for your crab. These are part of their natural diet and thus are important to offer. I offer spirulina powder, algae crisps, sea lettuce, and kelp. I know other people offer actual food grade seaweed as well.
5. "Other nutritional stuff" - this is where I put things that provide some of the trace minerals required by our crabs. Worm castings, salt (ensure it's a safe salt for the crabs; I use the ones on the addiction site), etc.
6. Nuts/grains - these contain important oils and nutrients for crabs. I have walnuts, pumpkin seeds, 9 grain cereal, 7 grain oatmeal, soynuts, flaxseed, psyllium seeds.
7. Veggies - onions, peppers, green beans (unseasoned), squashes, etc.
8. Chitin/calcium-providing protein - these are freeze-dried shrimp, (dried or dead) bloodworms, (dried or dead) mealworms, (dead) crickets, silkworms, etc. Chitin helps them harden exos properly and prepares them for/helps recover from a molt.
9. Other protein - eggs (hard boiled, powdered), dried silversides, sardines (in spring water), preservative free fish flakes (like bonito or dulse flakes), dried octopus or squid (found at the addiction store).
10. Calcium - eggshells, crushed coral, calcisand, etc.
Treats - bee products, peanut butter (organic/natural), organic noodles, cheese.